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Second Amended Consolidated Reseller Dealership Class Action

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Second Amended Consolidated Reseller Dealership Class Action Case 3:15-md-02672-CRB Document 1805 Filed 09/02/16 Page 1 of 116 1 Elizabeth J. Cabraser (State Bar No. 083151) LIEFF CABRASER HEIMANN & BERNSTEIN, LLP 2 275 Battery Street, 29th Floor San Francisco, CA 94111-3339 3 Telephone: 415.956.1000 Facsimile: 415.956.1008 4 E-mail: [email protected] 5 Lead Counsel for Plaintiffs (Plaintiffs’ Steering Committee Members 6 Listed on Signature Page) 7 UNITED STATES DISTRICT COURT 8 NORTHERN DISTRICT OF CALIFORNIA 9 SAN FRANCISCO DIVISION 10 11 12 IN RE: VOLKSWAGEN ‘CLEAN DIESEL’ MARKETING, SALES PRACTICES, AND MDL 2672 CRB (JSC) 13 PRODUCTS LIABILITY LITIGATION 14 This Document Relates to: 15 SECOND AMENDED A to Z Autosports, LLC, and MSI Auto Sales CONSOLIDATED RESELLER 16 And Repair, Inc., v. Volkswagen Group of DEALERSHIP CLASS ACTION America, Inc., Case No. 3:15-cv-05963-CRB COMPLAINT 17 (transferred from W.D. Wis., Case No. 3:15- cv-00664-WMC) 18 19 20 21 22 23 24 25 26 27 28 SECOND AM. CONSOL. RESELLER DEALERSHIP 1315109.1 CLASS ACTION COMPLAINT MDL 2672 CRB (JSC) Case 3:15-md-02672-CRB Document 1805 Filed 09/02/16 Page 2 of 116 1 TABLE OF CONTENTS 2 Page 3 INTRODUCTION .................................................................................................................... 1 4 JURISDICTION AND VENUE ............................................................................................... 5 PARTIES .................................................................................................................................. 6 5 A. Individual and Representative Plaintiffs ................................................................. 6 6 B. Defendants .............................................................................................................. 6 7 1. Volkswagen Defendants ................................................................................ 6 a. Volkswagen AG ................................................................................... 6 8 b. Volkswagen Group of America, Inc. .................................................... 7 9 c. Audi AG ............................................................................................... 7 10 d. Audi of America, LLC ......................................................................... 8 e. Dr. Ing. h.c. F. Porsche AG .................................................................. 8 11 f. Porsche Cars North America, Inc. ........................................................ 8 12 g. Martin Winterkorn ................................................................................ 9 13 h. Matthias Müller .................................................................................... 9 i. Michael Horn ...................................................................................... 10 14 j. Rupert Stadler ..................................................................................... 10 15 2. Bosch Defendants ........................................................................................ 11 16 b. Robert Bosch GmbH .......................................................................... 11 c. Robert Bosch, LLC ............................................................................. 12 17 d. Volkmar Denner ................................................................................. 12 18 COMMON FACTUAL ALLEGATIONS .............................................................................. 13 19 A. Volkswagen’s Plot to Dominate the Automotive Market ..................................... 13 B. Defendants’ Illegal “Defeat Device” Scheme ....................................................... 19 20 C. Bosch Played a Critical Role in the Defeat Device Scheme ................................. 25 21 1. Volkswagen and Bosch Conspire to Develop the Illegal Defeat Device .......................................................................................................... 25 22 2. Volkswagen and Bosch Conspire to Conceal the Illegal 23 “Akustikfunktion” ........................................................................................ 33 3. Volkswagen and Bosch Conspire in the U.S. and Germany to Elude 24 U.S. Regulators ............................................................................................ 36 25 4. Bosch Keeps Volkswagen’s Secret Safe and Pushes “Clean” Diesel in the U.S. .................................................................................................... 40 26 5. Defendant Denner Also Played a Critical Role in the Scheme .................... 43 27 D. Porsche Knowingly Adopts the Defeat Device in Its 3.0-liter Class Vehicles ................................................................................................................. 44 28 E. Volkswagen’s “Clean” Diesel Advertising Campaign ......................................... 46 - i - CONSOLIDATED AM. RESELLER DEALERSHIP 1315109.1 CLASS ACTION COMPLAINT MDL 2672 CRB (JSC) Case 3:15-md-02672-CRB Document 1805 Filed 09/02/16 Page 3 of 116 1 2. VW’s False and Misleading Advertisements ............................................... 46 2 3. Audi’s False and Misleading Advertisements ............................................. 56 4. Porsche’s False and Misleading Advertisements ......................................... 60 3 5. Volkswagen’s Nationwide Advertising Campaign Was Highly 4 Effective, and Volkswagen Profited Handsomely from Selling the Class Vehicles .............................................................................................. 61 5 F. Defendants’ Dirty Diesel Scheme Starts to Unravel ............................................. 62 6 G. Once Caught, Volkswagen Admits its Fraud—in Part ......................................... 64 H. Volkswagen’s Failed Attempts at Remedial Action ............................................. 75 7 I. Volkswagen Caused Billions of Dollars in Harm to U.S. Consumers .................. 76 8 TOLLING OF THE STATUTES OF LIMITATIONS .......................................................... 80 9 PLAINTIFFS’ FACTS ............................................................................................................ 82 CLASS ACTION ALLEGATIONS ....................................................................................... 82 10 CLAIMS FOR RELIEF .......................................................................................................... 87 11 FIRST CLAIM FOR RELIEF: Violation of 18 U.S.C. § 1962(c)-(d) The Racketeer Influenced And Corrupt Organizations Act (“RICO”) ........................ 87 12 B. Description of the Defeat Device RICO Enterprise .............................................. 89 13 2. The Volkswagen Entity Defendants ............................................................ 90 14 3. The Volkswagen Entity Defendants’ Directors, Officers, and Engineers ..................................................................................................... 92 15 b. Martin Winterkorn .............................................................................. 92 16 c. Matthias Müller .................................................................................. 93 d. Michael Horn ...................................................................................... 93 17 e. Rupert Stadler ..................................................................................... 94 18 f. Scott Keogh ........................................................................................ 94 19 g. Detlev von Platen ............................................................................... 95 h. Ulrich Hackenberg .............................................................................. 95 20 i. Frank Tuch .......................................................................................... 96 21 j. Wolfgang Hatz .................................................................................... 97 22 4. The Bosch Defendants ................................................................................. 97 C. The Defeat Device RICO Enterprise Sought to Increase Defendants’ 23 Profits and Revenues ............................................................................................. 98 24 D. Mail and Wire Fraud ........................................................................................... 102 SECOND CLAIM FOR RELIEF: FRAUD ................................................................ 107 25 THIRD CLAIM FOR RELIEF: FAILURE TO RECALL/RETROFIT ..................... 109 26 FOURTH CLAIM FOR RELIEF: UNJUST ENRICHMENT ................................... 110 27 PRAYER FOR RELIEF ....................................................................................................... 110 DEMAND FOR JURY TRIAL ............................................................................................ 111 28 SECOND AM. CONSOL. RESELLER DEALERSHIP 1315109.1 - ii - CLASS ACTION COMPLAINT MDL 2672 CRB (JSC) Case 3:15-md-02672-CRB Document 1805 Filed 09/02/16 Page 4 of 116 1 Plaintiffs bring this action on behalf of themselves and all others similarly situated, 2 against (1) the Defendants collectively known as “Volkswagen”: Volkswagen Aktiengesellschaft 3 (“VW AG”), Volkswagen Group of America, Inc. (“VW America”) (together, “VW”), Audi 4 Aktiengesellschaft (“Audi AG”), Audi of America, LLC (“Audi America”) (together, “Audi”), 5 Dr. Ing. h.c. F. Porsche Aktiengesellschaft (“Porsche AG”), Porsche Cars North America, Inc. 6 (“Porsche America”) (together, “Porsche”), Martin Winterkorn (“Winterkorn”), Matthias Müller 7 (“Müller”),
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